As widely anticipated, the DTI has ruled that vertical agreements (which allow publishers to appoint wholesalers exclusively to serve a particular region) should no longer be excluded from EU competition law.
However, this does not mean that exclusive territories will suddenly end when the UK’s exemption is repealed in May 2005, said a DTI spokesman.
“Publishers have until next year to ensure they are in full compliance with competition law and to seek advice from the OFT. The May deadline won’t automatically trigger OFT investigations into every contract. The point is, they will be subject to legal challenge.”
Newspaper Publishers Association director Steve Oram said he was “cautiously optimistic” the trade could develop contracts providing for exclusive territories to continue with a clean bill of health while at the same time introducing elements of competition.
Periodical Publishers Association chief executive Ian Locks said there were several things that could be explored, such as having enough business up for tender at certain points so that the bidding process would prove more appealing to new wholesalers.
Stefan Wojciechowski, head of news and magazines at the National Federation of Retail Newsagents, said the DTI ruling did not necessarily mean that Tesco or other national chains would now push for national distribution deals.
“You have to ask yourself why they gave up the first time round and whether this ruling really makes any difference.”
British Retail Consortium retail services director Amanda Miller said the BRC would present a wish list from retailers at a joint industry group meeting, scheduled for Friday March 5.